Hudong to buy US$1.5b assets
Monday, January 29, 2007
CHINESE ship engine maker Hudong Heavy Machinery Co says it will issue new shares to buy shipbuilding assets in a 12 billion yuan (US$1.5 billion) deal that analysts say will pave the way for a listing of its state parent.
Hudong's parent, China State Shipbuilding Corp (CSSC) the world's third-largest shipbuilder was expected to list Hudong in Hong Kong after completing the deal to gain wider access to the domestic and overseas capital market, analysts said.
"The injection would transform Hudong into an integrated ship-building company. It is an effective listing of all of CSSC's key assets for civil use," said Zhang Jincan, ship-building sector analyst at Guotai & Junan Securities.
A source familiar with the matter told Reuters in October that CSSC was planning a Hong Kong IPO this year.
CSSC, which builds naval and civilian ships, is the world's number three builder of ocean-going vessels by capacity, behind Hyundai Heavy Industries Co and Japan's Imabari Shipbuilding Co Ltd, according to shipbrokers Clarkson Plc.
The Chinese state-run firm aims to become the world's number one shipbuilding group in 2015.
It planes to build two shipbuilding bases one in Shanghai and another in Guangzhou to boost capacity, according to its statement.
China has been pushing major state firms to list all their assets on the stock market in a bid to curb the power of unlisted parent firms over private shareholders, and boost the global competitiveness of its state sector.
Shanghai Automotive, Shanghai International Port and Aluminium Corp of China listed all of their key assets last year.
Hudong's Shanghai-listed A-shares soared 10 per cent to a record high of 41.49 yuan each on Monday.
Trading in the stock, which has almost quadrupled over the past 12 months, had been suspended since last Wednesday pending an announcement. Reuters
Hudong's parent, China State Shipbuilding Corp (CSSC) the world's third-largest shipbuilder was expected to list Hudong in Hong Kong after completing the deal to gain wider access to the domestic and overseas capital market, analysts said.
"The injection would transform Hudong into an integrated ship-building company. It is an effective listing of all of CSSC's key assets for civil use," said Zhang Jincan, ship-building sector analyst at Guotai & Junan Securities.
A source familiar with the matter told Reuters in October that CSSC was planning a Hong Kong IPO this year.
CSSC, which builds naval and civilian ships, is the world's number three builder of ocean-going vessels by capacity, behind Hyundai Heavy Industries Co and Japan's Imabari Shipbuilding Co Ltd, according to shipbrokers Clarkson Plc.
The Chinese state-run firm aims to become the world's number one shipbuilding group in 2015.
It planes to build two shipbuilding bases one in Shanghai and another in Guangzhou to boost capacity, according to its statement.
China has been pushing major state firms to list all their assets on the stock market in a bid to curb the power of unlisted parent firms over private shareholders, and boost the global competitiveness of its state sector.
Shanghai Automotive, Shanghai International Port and Aluminium Corp of China listed all of their key assets last year.
Hudong's Shanghai-listed A-shares soared 10 per cent to a record high of 41.49 yuan each on Monday.
Trading in the stock, which has almost quadrupled over the past 12 months, had been suspended since last Wednesday pending an announcement. Reuters
2007/1.%20January/30%20Jan/BT30Jan.9.pdf
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